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Laura's preferences over commodities x 1 and x 2 can be represented by U(x 1 ,x 2 )=min{3x 1 , x 2 }. She maximizes

Laura's preferences over commodities x1 and x2 can be represented by U(x1,x2)=min{3x1, x2}. She maximizes her utility subject to her budget constraint. Suppose there is an increaseinp1.

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a. There are both income and substitution effects of this price change.

b. There is a substitution effect but not an income effect of this price change.

c. There is an income effect but not a substitution effectof this price change.

d. It is unclear whether the consumer will buy more or lessx1as a result of the increase in p1.

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